Impact of Cost Accounting Essay

Words: 3133
Pages: 13
Open Document
IMPACT OF COST ACCOUNTING ON FINANCIAL DECISION

INTRODUCTION
In the modern business world, the nature and functioning of business organizations have become very complicated. They have to serve the needs of variety of parties who are interested in the functioning of the business. These parties constitute the owners, creditors, employees, government agencies, tax authorities, prospective investors, and last but not the least the management of the business. The business has to serve the needs of these different category of people by way of supplying various information from time to time. In order to satisfy the needs of all these group of people a sound organisation of accounting system is very essential.
In the ancient days the …show more content…
But financial accounts fails to provide such useful cost data to management.
(ix) It does not provide a basis for cost comparison : Financial accounts does not help in cost comparison over a period of time or between two jobs or two operations. Thus a basis for judging the efficiency of an year with past year or worthfulness of two different jobs or operations cannot be appraised.
(x) It does not make use of control techniques : Financial accounts fail to make use of certain important cost control techniques such as budgetary control and standard costing. Thus financial accounts do not facilitate measuring the efficiency of the business with the help of control techniques.
(xi) It fails to ascertain break-even point : Financial accounting does not help in ascertaining the break-even point, i.e., the sale or output where the revenue equals the cost. Hence, the point of no-profit-no-loss cannot be made out under financial accounts.

To Ensure Optimum Utilisation of Resources
In todays business world, the resources available are very scarce. Hence every business unit must strive hard to obtain maximum output with the available input. In order to ensure the optimum utilisation of scarce resources, the value of input is measured against the value of output. This implies matching cost per unit of production
Show More

Related Documents: Impact of Cost Accounting Essay

Successful Efforts and Full Cost methods Essay

SE and Full Cost methods: Although virtually all mineral producing enterprises use historical cost accounting to account for their preproduction activities, this does not mean that all enterprises follow the same accounting concept. Several approaches to determining the capitalized cost of an asset related to the mineral reserves are used, yielding significantly different result. The two commonly used approaches are SE method and the FC method. However, the FC and the SE method have been applied…

Words 765 - Pages 4

ACCT 2301 Study Guide

objectives of Generally Accepted Accounting Principles (GAAP). Purpose of financial reporting Purposes of and differences between financial accounting/management accounting/tax accounting Purposes/Authority of the Securities and Exchange Commission and the Financial Accounting Standards Board Chapter 2 3 primary/general purpose financial statements, nature of and reporting periods/dates covered by each. Nature of Assets, Liabilities, Equity, Revenue and Expenses. Impact of financial transactions…

Words 673 - Pages 3

financial accounting Essay examples

Relevant accounting issues regarding emission trading scheme The European Union Emissions Trading Scheme (Eu ETS) constitutes ‘cap-and-trade’ scheme. For example, not only the scheme applies to carbon-intensive industries at the inception of ETS such as electricity generation, but also it includes the aviation industries. In particular, if entities or industries surrender a corresponding number of emissions allowances, they can be allowed to emit carbo dioxide into the atmosphere. Since emission…

Words 2076 - Pages 9

Executive Summary Myer Holdings Pty Ltd Essay

investing within the current economic climate. The key accounting policies that Myer Holding has used in analysing its financial position include total assets of inventories, PP&E and intangible assets as well as borrowings, revenue, depreciation and foreign currency. The effect of these policies is apparent in the company’s annual report consisting of its statement of financial position and performance as well as providing a summary of these impacts in the notes to the financial statements. Throughout…

Words 2987 - Pages 12

Hrm 531 Week 6 Internal Control System

system used within the company. The software helps auditors to better identify the problems at hand. The audit team put together will conduct a daily run of accounting reports to help eliminate potential risk within a company sector. The ERP which is a security system which help with optimizing business transactions, reduce the total cost of information systems used in auditing. (Allen, 2008) The ERP system helps to identify the problems that may occur within an organization. This is another…

Words 1317 - Pages 6

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles Carrie Sawyer HCS/571 October 27, 2014 David Karluk Generally Accepted Accounting Principles Healthcare Organizations employ accountants that monitor the financial aspects of that organization. These internal accountants’ keep track of the organizations financial records throughout the course of the year (Finkler, Kovner and Jones 2007). Once a year the Healthcare organization hires a Certified Public Accountant (CPA) to examine the financial records of the…

Words 1153 - Pages 5

Essay about Volkswagen Adopt IAS

October 22nd, 2013 [International Accounting and financial statement] Case 2 “Volkswagen Group” Questions and Answers 1. Based on the information provided in the chapter, describe the basic features of German accounting at the time Volkswagen adopted IAS. What development factors cause these features? APPUNTI DA FARE IAS compliant In 2001 first consolidated financial statement All mandatory requirements fulfilled IAS 12 and IAS 39 already fulfilled in 2000 financials Clear and fair…

Words 1152 - Pages 5

Exam I Review Information Essay examples

Suggested Study Topic ACCT 3309, Exam I Class I: Understand what a general ledger is and how it is used in the accounting process. The database of accounting information. A company's main accounting records. A general ledger is a complete record of financial transactions over the life of a company. The ledger holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses. What are the three primary…

Words 1176 - Pages 5

Sarbanes Oxley Act Research Paper

ACC 403 – Auditing A paper on Sarbanes-Oxley Act Submitted to Professor Leeann Lane In partial fulfillment for the requirements of ACC 403 – Auditing Assignment #1 Strayer University at Woodbridge Accounting Woodbridge, VA By William J. Thomson SU200060080 850-736-5763 February 23, 2013 Sarbanes-Oxley Act The Sarbanes-Oxley Act (SOX) was signed into Law in July 2002. The necessity of such an act was considered needed to combat the fraud committed…

Words 1737 - Pages 7

Essay on Sarbanes Oxley Act Of 2002

intended to serve the same purpose. Among the many regulatory requirements included in the SOX Act of 2002, below are probably the most important requirements that corporations are required to comply (Slaughter 2009): Creation of the Public Company Accounting Oversight Board- a nonprofit corporation established by Congress to oversee the audits of public companies in an attempt to protect the interest of investors (PCAOB, 2015). Increase in personal liability to auditors, executives and board members-…

Words 796 - Pages 4